Transportation & Logistics

 

Undergoing constant transformation though less spotlighted, the Logistics Industry is an integral part of global economic growth. However, constant pressure and continuing efforts to streamline supply chains have resulted in cost reduction being the primary norm for logistics companies. Its capital-intensive nature allows very little flexibility in asset reallocation or capacity reduction, thereby requiring companies to work in a partnership mode.

 

Supply chains are becoming global due to worldwide economic integration and the logistics industry faces challenges both at the global and individual country levels. Global transformation issues like green logistics, reduction in costs and transit times have driven companies to adopt various technologies to improve efficiencies. A high level of automation at warehouses, with the usage of autonomous and electric vehicles has helped the industry save on costs.

 

Global transformation issues also impact India and there are certain country-specific trends that drive growth in the sector. Goods and Services Tax (GST) could have a profound impact on how logistics firms and supply chains function, with the impact felt across the value chain.

 

Consolidation of transporters and warehousing service providers that will allow for economies of scale, are still gradual. E-retailing can have a profound impact on the strategies of logistics companies and their asset investment. Increased penetration of e-retailing could accelerate the need for logistics companies to provide last-mile connectivity as part of their service offerings and can evolve to be a strategic differentiator.

 

Evolving online aggregation model have the potential to disrupt existing businesses by addressing some of the more persistent issues like return load visibility. With better funding these models can greatly improve fleet utilization, generate better profitability and lead to load consolidation and fleet optimization. Given that the industry faces a critical short supply of drivers, these trends in conjunction with better highways can have a transformative effect on the logistics and supply chains in India.

 

Avanteum advises logistics companies on their growth strategies, benchmarking studies, customer interaction initiatives and product offerings in addition to sectoral trends. We also provide organizations with services that improve their supply chain performance; and supply chain optimization.

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